RBI's fund transfer eases Centre's gross tax revenue growth target to 16%

The RBI's transfers would effectively add Rs 58,000 crore to the Centre's kitty in the current fiscal year

The Reserve Bank of India’s (RBI’s) decision to transfer Rs 1.76 trillion to the central government would potentially reduce the Centre’s gross tax revenue target for 2019-20 (FY20) by Rs 1 trillion due to the very nature of the revenue. The RBI board accepted the Jalan Committee recommendations on Monday.

This would make the fiscal deficit target of 3.3 per cent of gross domestic product easily achievable, as tax revenue (gross) would now be required to grow at 16 per cent in the remaining part of the fiscal year. Had it not been for the extra transfer, the Centre would